Richard McMeeken: Benefiting business in Scotland’s commercial courts
Richard McMeeken, partner at Morton Fraser, reflects on the benefits of the commercial courts system following its 25th anniversary earlier this year.
Specialist courts in Scotland are nothing new. In 1994 Lord Penrose established a commercial court in order to respond to the demands of the business community for a quick and straightforward way of resolving disputes and also to make Scotland a more attractive place to litigate compared with other jurisdictions, particularly England & Wales. Other forms of dispute resolution were also beginning to gain in popularity such as arbitration and mediation and the judiciary was keen to ensure that the court remained the forum of choice for commercial actions.
On its 25th birthday the commercial court is thriving and it is worth remembering the significant benefits that it brings to businesses needing to litigate in Scotland.
1) The cost of raising commercial proceedings in Scotland is lower than in England & Wales
While there is no real difference in procedure nor the quality of decision north or south of the border, there is a significant difference in cost. The court dues incurred in getting a summons to court are only £313 whereas equivalent lodging dues in England are typically £10,000. So any corporate lawyers on the fence as to whether to put an English or Scottish jurisdiction clause into a contract should give careful consideration before subjecting their client to the additional cost of English jurisdiction.
2) Commercial court decisions can be more predictable than decisions in arbitration
The legal community is undoubtedly split into two groups on this but it is hard to commend arbitration to clients as compared to the commercial court (accepting that in certain specialist areas where technical input is important, the position may be different). Arbitration tends to be no less expensive nor time consuming and the quality of decision making at arbitration can be variable, whereas because commercial decisions are based on precedent, they are often more predictable. So while the confidential nature of arbitration can be attractive to parties, the commercial court is typically a better choice for litigants wanting a clear and predictable outcome.
3) It is more specialised than other courts
This benefit cannot be underestimated. Having a dispute managed and decided upon by a commercially experienced judge is of huge benefit and can be sharply contrasted to the position in the ordinary court where actions regularly call before judges without any commercial experience. The consistency of having a single judge deal with the whole case and that judge having practical experience with the kind of dispute in question is invaluable and the specialist nature of the court has since been followed in other areas of practice such as family, personal injury and intellectual property.
4) Decision-making is comparatively faster
Ordinary actions seem to last forever. It can be months before the parties’ written case reaches anything like its final form and even longer before the case first gets considered by a judge. A trial is usually years down the line particularly if it’s a long trial that needs a lot of court time. By contrast, things happen comparatively quickly in the commercial court. The case will be considered by a judge almost as soon as defences are lodged and there is a limited period before a final hearing is fixed. In between, the case is carefully managed by the judge to ensure that neither party is allowed to delay matters unnecessarily. So the case is resolved as quickly as it can be within the court system, enabling businesses to move on from the dispute as quickly as possible.
5) The commercial courts have more flexible procedures
Procedure in commercial cases can be tailored to the needs of the parties and the circumstances of the particular case. Innovations in relation to the use of experts and the way in which they give evidence, witness statements taking the place of evidence in chief and procedural steps being abbreviated or missed out entirely in more straightforward cases all assist in reaching the right result in the best way possible for parties.
It is not of course all plain sailing. Innovation is not always a good thing and the production of electronic bundles of documents (which should be a straightforward process) has recently caused a lot of additional time and cost being added to commercial actions. Undoubtedly, moving more documents online and using IT to its full potential is a good thing but, as a solicitor, you are often left with the impression that the court system is about 20 years behind the profession in this regard, and it needs to catch up quickly. Whether that means investment in a new IT system or just a better procedure for those using the current one is for others to say. However, in general terms the commercial court remains a key attribute of the Scottish court system and the best place for business to resolve disputes.
- Richard McMeeken is a partner in the litigation and dispute resolution team at independent Scottish law firm Morton Fraser.